January 2009
14 posts
1 tag
Fix the Accounting, Then Fix the System
Almost all of the bailout plans being discussed fail to consider a simple fact: without the homogenization of accounting rules, any plan will represent a piecemeal approach to the problem. Some banks are holding out their hands to get TARP funds; they are on the brink of failure and are seeking a lifeline. Others are saying “Nah, we don’t want them (TARP funds),” because they...
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I Just Don't Get It
Why is the market so jazzed by the sketchy details we have over the “new” bailout plan? Buying bad assets, but at what price? Who is bearing the cost, the US taxpayer or the bank’s common stockholders and debtholders? Early handicapping is that the taxpayer is going to take it on the chin. This is bad for many, good for a few. Not much of an improvement over TARP: The Horror...
Learning from Failure - SIIA Keynote Presentation...
SIIA Previews Presentation 2009 From: infoarbitrage, 9 minutes ago SIIA Previews Presentation 2009View more presentations or upload your own. (tags: siia failure) Roger Ehrenberg’s Keynote address at the 2009 SIIA Previews Conference, New York City SlideShare Link
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Nationalization Isn't a Dirty Word
The time has come to acknowledge the depths of our problems. It has already been demonstrated that propping up failing institutions does nothing but delay the inevitable. It consumes staggering sums, it wastes time, and it prolongs what will invariably prove to be one of the sharpest economic downturns in generations. A downturn that originated not in the real economy, but in the financial...
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It's Not About Hope
Like most, I watched yesterday’s Inaugural festivities with interest, less in the pomp and pageantry and more in the messaging from our new President. While I don’t think it will go down as among the most memorable and quotable of addresses, it was blunt, honest and grounded. But let’s be clear; notwithstanding the positive sentiment around Obama’s taking the reins, and the...
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Obama's Big Chance
Albeit reluctantly, the Senate gave the go-ahead to release the additional $350 billion in TARP funding contemplated by the original plan. A 52-42 vote isn’t exactly a resounding vote of confidence, but who can blame the Senators for their cynicism given the manner in which the first $350 billion was disbursed and the utter lack of tracking and accountability? The representative case for...
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SOC or Bust
With the implosion of Citigroup and the depth of losses across the banking sector, including today’s announcement that Bank of America is seeking additional bailout funding, the time has come to create and empower the Stabilization Oversight Council (SOC). The Treasury, positioned as the only game in town with respect to policy-making to deal with the financial crisis, has come up way, way...
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Citigroup - Somebody Please Say "Game Over"
From the Wall Street Journal Online:Until recently, Citigroup Chief Executive Vikram Pandit had repeatedly backed the company’s “universal bank” model. But with directors and executives now bracing for a fourth-quarter operating loss of at least $10 billion and federal officials worried about previous turnaround efforts, Citigroup has decided that more dramatic action is needed,...
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The Citi Never Sleeps - Only its Board, Risk...
The Citigroup of the past decade is THE shining example of an array of costly failures: accounting policies; business strategies; management compensation schemes; risk management practices; and Government policies. And now we see that Citigroup is doing badly; more badly, in fact, than many thought likely. Rubin is out. Smith Barney is being jettisoned for a little cash and some accounting...
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Wall Street, Circa 2010: Disaggregation and...
The Wall Street of today is almost unrecognizable from that at which I worked for almost two decades. The rise of the trading culture, first brought into the mainstream by John Gutfreund and Salomon Brothers in the 1980s and which lasted for more than 20 years, is now a vestige of the past. Huge trading losses have been posted. Risk limits have been taken down. “Structured Product” is...
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Early Stage vs. Later Stage Investing: Risks and...
This has been a topic du jour. Seed stage investing is too risky, with valuations coming down the risk/reward is better in later stage companies, etc. Part of this is due to more seasoned companies - those that have done A and B rounds and are generating revenues - either seeking additional runway to achieve profitability or profitable companies seeking a “rainy day” cushion. But...
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Companies In the News
In recent days some of my companies have done some pretty cool stuff. Given the general malaise I wanted to share a few rays of sunshine: Buddy Media: Buddy Media has been on a tear, both in terms of performance (read: closing deals) and contributing to the social media ecosystem. First, Mike Lazerow and team came out with a white paper concerning what advertisers needs to know about social apps....
Some Thoughts on 2009
So much promise, so many risks. This is how 2009 is shaping up. While euphoria surrounding the Obama Administration’s fiscal stimulus plans will drive the markets early in the year, I believe this rally will lose steam as massive deficit spending begins to shine a light on the greatest risk facing the US: debasement of the currency. The power we will be handing our creditors is stunning, and...
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Happy New Year and Help Wanted
Happy New Year, everybody. I hope you all had a good break and are ready to get back at it in 2009. While I believe that the US public markets will generally suck this year, I continue to feel that we are the cusp of a historic opportunity in the early-stage investment arena. Fortunes will certainly be made in the liquid markets, but REAL fortunes and REAL value will be created through innovation,...